airlines summer airfares likely to soar

Soaring fuel prices and rising passenger demand will make summer travel to international destinations more expensive from a year earlier, said aviation and travel trade experts.
Fuel surcharges are likely to push airfares higher to make up for a 25% increase in airline gas prices so far this year, industry watchers warn.
Singapore Airlines has increased fuel surcharge by 16% from February. While Singapore Airlines charged 8,558 as fuel surcharge on a Mumbai-Singapore-Mumbai ticket in February, it charges 9,924 in April. The airline has added an additional $32 (about 1,400) on tickets sold after April 21.

Other international airlines such as British Airways and Emirates have also joined the bandwagon. British Airways has hiked its fuel surcharge by £10 (about 730) in April."Rising fuel cost is a worry so we have to make sure all capacities we employ are beneficial. Almost all airlines have increased fuel surcharge by few Euros but that is not compensating for the high fuel prices," said Axel Hilgers, director, South Asia, Lufthansa.

"Due to the current volatility of oil prices, Emirates is introducing a fuel surcharge to reflect the substantial recent increases in our fuel costs," Emirates had informed its trade partners in a statement last week.

Emirates accounts for a lion's share of outbound traffic from India, beating rival carriers such as British Airways, Lufthansa and Singapore Airlines. As jet fuel constitutes about 40% of an airline's operating cost, higher fuel surcharge helps cover increased cost.
Growing demand for outbound and domestic travel is another reason for rising fares.
"Seats to Europe, Hong Kong and America in the economy class are all sold out. To maximise yields from the remaining seats is what the airlines will look for. It will be a function of demand and supply. For example, a London round trip that is available for 45,000 will cost an additional 10,000 - 12000 or more on weekends," Mr Prakash said. According to travel trade experts, the levy of increased service tax from April 1 on economy class seats on international routes (750) is also marginally impacting the pricing of tickets.